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IP - Presentazione webcast "FY 2024 Results & Strategy Update" - Annulla e sostituisce la versione pubblicata in data 12/03/25 - Cancels and replaces the version published on 12/03/25

Company: ERG Date: 2025-05-07 Language: Italian Register to download
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# **FY 2024 RESULTS & STRATEGY UPDATE**

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12 March 2025

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#### **DISCLAIMER**

This document contains certain forward-looking information that is subject to a number of factors that may influence the accuracy of the statements and the projections upon which the statements are based. There can be non assurance that the projections or forecasts will ultimately prove to be accurate; accordingly, the Company makes no representation or warranty as to the accuracy of such information or the likelihood that the Company will perform as projected.

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#### AGENDA

- ❑ **FY 2024 Highlights and Delivery on our Strategy**  Paolo Merli, CEO
- ❑ **2024-2026 Strategy Update**  Paolo Merli, CEO
- ❑ **Financials & Capital Structure**  Michele Pedemonte, CFO
- ❑ **FY & 4Q 2024 Results Review**  Michele Pedemonte, CFO
- ❑ **2025 Guidance & Conclusions** Paolo Merli, CEO
- ❑ **Appendix**

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# **FY 2024 HIGHLIGHTS AND DELIVERY ON OUR STRATEGY**

Paolo Merli - CEO

### 2024 KEY FIGURES(1)

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#### **Solid results despite the volatile environment**

(1) Adjusted figures on continuing operations (excluding CCGT for FY 2023) (2) It refers to figures net of clawback measures (including IFRS 16 effect)

(3) Net Profit post-Minorities, and net of clawback measures

(4) It does not include IFRS 16 liability, respectively for €172mn as at 31.12.23, and €229mn as at 31.12.24

## DELIVERING ON OUR STRATEGY

| Solid Execution<br>+579MW: Repowering<br>& Greenfield in Italy and France, M&A in France and entry in the US                                                             |  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| Route-to-market<br>5<br>long-term<br>PPAs<br>signed<br>with<br>leading<br>corporates<br>and<br>utilities<br>for<br>ca.<br>500GWh/year<br>of<br>RES<br>energy<br>Strategy |  |
| Sustainable<br>Issued ERG's fourth<br>€500mn Green Bond, EIB financing €243mn for renewable energy development<br>Finance                                                |  |
| ESG<br>Consolidated Top Performance position in main ESG Ratings and included in S&P Yearbook 2025                                                                       |  |
| Shareholders<br>Dividend + Share Buyback for a total purchase of 1.1mn own shares(1)<br>€1/sh<br>Remuneration                                                            |  |

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## SOLID TRACK-RECORD IN DELIVERING ON OUR STRATEGY

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#### **Keep delivering on our growth strategy with a mix of internal projects and M&A**

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## PIONEER IN REPOWERING: FIRST 270MW FULLY IN OPERATION

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#### **ERG's first tranche of repowering proved strongly value accretive <sup>8</sup>**

## PRO-ACTIVE ROUTE TO MARKET APPROACH

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**ERG well positioned to capture growing energy needs from emerging datacenters** 

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(1) Corresponding to ca. 37% of full-year production

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## REGULATORY FRAMEWORK EVOLUTION IN OUR CORE GEOGRAPHIES

| Country |   |       | RES Auctions: type | & duration |   | Storage: support mechanisms<br>and planning                  |
|---------|---|-------|--------------------|------------|---|--------------------------------------------------------------|
|         | ✓ | FER X | 2 ways CFD         | 20 years   | ✓ | Capacity mkt 2026-28<br>MACSE exp in 2025<br>(delivery 2028) |
|         | ✓ |       | 2 ways CFD         | 20 years   |   | Capacity mkt<br>Expected as of 2026                          |
|         | ✓ |       | 1 way CFD          | 20 years   |   | Capacity mkt<br>Expected in 2028                             |
|         | ✓ |       | 2 ways CFD         | 15 years   | ✓ | Capacity mkt 2026-28                                         |
|         |   |       | 2 ways CFD         | 12 years   |   | Capacity<br>mkt<br>Expected<br>in 2025                       |

**FERX first auction expected in 2025 New opportunities in BESS to be exploited**

### ERG AS OF TODAY: A SOLID AND INTERNATIONAL PLATFORM

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# **2024-2026 STRATEGY UPDATE**

Paolo Merli - CEO

## VALUE OVER VOLUME APPROACH REINFORCED

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**Storage, Hybridization & Digitalization** 

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**Selective growth 4.2GW** installed capacity in 2026 (vs 4.5GW); focus on repowering & organic

**Investments/EBITDA CAPEX: €1.0bn 2024-2026 (-20% vs prev. €1.2bn); EBITDA >€600mn @2026**

**Route to market Confirmed target 85%-90%** quasi-regulated on total EBITDA through CFD & PPA

**Balance Sheet / Value Creation** Commitment to **IG rating: DCM as best option** for sizable/competitive funding **Value over Volume approach confirmed** (IRR targeted 200bps+ over WACC)

**Geographical Diversification** Geographic **focus on tier-1 countries**: grow and consolidate Assessing **asset rotation** opportunities in tier-2 countries

> **Storage as a new stream** of development **Hybridization** as an opportunistic technology to mainly protect our assets **Digitalization** to optimize the performance of assets

**ESG A strategic priority**: consolidating ERG's tier-1 positioning

**Shareholder Remuneration 2025: €1/sh** to be paid as dividend plus SBB (already done) equal to €0.15/sh **2026+: floor at €1/sh as dividend** + potential upside from buybacks

### CAPEX & PIPELINE UPDATED

~0.4

2024

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**Size of pipeline maintained, reducing solar exposure & more focus on flexibility**

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## RELYING ON A FULLY SECURED GROWTH IN THE SHORT TERM

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**~130MW(1) under construction, route to MKT secured ~500MW(2) fully authorized, waiting for auctions and FERX**

#### **Adding visibility to our growth prospects in IT, FR, UK and DE. First move in Storage**

(1) Tot. MW under construction: on absolute terms = 134MW, on a differential basis = 120MW (2) Tot. MW fully authorized: on absolute terms = 495MW, on a differential basis = 314MW, including also Nulvi Ploaghe

#### REPOWERING: ITALIAN CASE

- **More than 45%** of the current **Italian wind fleet** can be **repowered: ~6GW** out of 13GW
- **Repowering** is key **to achieving the 2030 NECP target** for onshore wind: 26GW
- Through **repowering**, **potential increase of** installed **wind capacity by +7.5GW**, i.e. ~58% of the required addition to achieve the PNIEC target

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### REPOWERING AS A STRATEGIC PILLAR IN ITALY AND ABROAD

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**A more sizeable pipeline in Repowering to be activated opportunistically**

## BESS - BATTERY ENERGY STORAGE SYSTEM

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#### **BESS as a new stream of growth to add flexibility in RES portfolio**

### ESG: A STRATEGIC PRIORITY

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**Net Zero target by 2040** to continue decarbonization path **Circular Economy:** minimizing waste in wind repowering **Natural Capital Preservation** in our organic RES developments

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- **Sharing Value** with Local Communities **ERG Academy** to engage next generation in energy transition
- 
- **Safety first** is a priority in all our actions **DEI&B(1) well defined goals** to foster engagement & empowerment

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**Enhancing governance model** by promoting ethical and responsible business conduct **Engaging the supply chain** in decarbonization, D&I, and protecting Human Rights

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# **FINANCIALS & CAPITAL STRUCTURE**

Michele Pedemonte - CFO

## 640MW OUT OF INCENTIVES IN THE BP PERIOD

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**PPA as route to market to stabilize revenues after the end of incentives <sup>21</sup>**

### A SOLID FINANCIAL STRUCTURE

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#### **A strong and efficient balance sheet with a well-spread repayment schedule**

(1) Maturities excluding Broken Cross Project Financing into Group debt since closing of the acquisition in January 2025

#### INVESTMENT GRADE RATING ALWAYS A PILLAR OF ERG GROWTH PLAN

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#### **Strong Commitment to IG rating**

(1) Excluding IFRS 16 liability

(2) Based on ERG's estimates

## COST OF ERG SUSTAINABLE DEBT REMAINS MODERATE

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#### **ERG has the lowest cost of debt and the highest dividend yield vs pure players**

(1) Internal estimation based on latest publicly available data (ENEL, Orsted, A2A, Iren, Acciona Energia)

(2) Data referred to 2023-2024 (Voltalia, Neoen, Encavis, Solaria, Terna Energy, Grenergy, Boralex, Orsted, Acciona Energia, EDPR)

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# **FY & 4Q 2024 RESULTS REVIEW**

Michele Pedemonte - CFO

## WIND DROUGHT SINCE OCTOBER CONTINUING IN JAN-FEB 2025

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(1) Source: UL Wind Index. Wind anomalies are calculated as a percent deviation from the 1995-2019 mean wind speed at 100m above ground level

(2) Graph based on data from Terna's Monthly Reports on the Electricity System

(3) DunkelFlaute: periods with combined wind and solar PV generation very low

### 4Q 2024 EBITDA & PRODUCTION

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#### **Exceptional wind drought across EU only partially offset by larger installed capacity**

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#### INVESTMENTS 489 53 553 112 2023 2024 4Q 2023 4Q 2024 M&A: 319(2) M&A: 184(1) Italy France Spain UK Sweden Corporate US Germany

- (1) M&A CAPEX related to the closing in Spain of two Solar acquisitions: Garnacha (for about €152mn, closing on June 23, 2023), and Fregenal (for an amount of €32mn, closing on June 30, 2023)
- (2) M&A CAPEX related to the closing of two Wind & Solar acquisitions in France (for about €84mn, closing on January 29, 2024) and in US (for an amount of €235mn, closing on April 24, 2024)

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#### ADJUSTED P&L

| 2024  | 2023  | Euro millions                                               | 4Q 2024 | 4Q 2023 |
|-------|-------|-------------------------------------------------------------|---------|---------|
| 535   | 534   | Adjusted EBITDA                                             | 145     | 159     |
| (263) | (223) | Amortization<br>and<br>depreciation                         | (70)    | (56)    |
| 271   | 312   | Adjusted EBIT                                               | 75      | 103     |
| (27)  | (14)  | Net<br>financial<br>income<br>(expenses)                    | (9)     | (2)     |
| 244   | 298   | Adjusted Results before taxes                               | 66      | 101     |
| (66)  | (71)  | Income<br>taxes                                             | (20)    | (24)    |
| 178   | 227   | Adjusted Results on continued operations                    | 46      | 77      |
| (3)   | (2)   | Minority<br>interests                                       | (1)     | 0       |
| 175   | 226   | Adjusted Net Profit                                         | 45      | 77      |
| 0     | (7)   | (1)<br>Adjusted<br>Results<br>on discontinued<br>operations | 0       | (1)     |
| 175   | 219   | Adjusted Results for the period                             | 45      | 75      |
| 27%   | 24%   | Tax Rate                                                    | 31%     | 24%     |

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Note: Figures include IFRS 16 effect (1) FY e 4Q 2023 figures refer to CCGT Results

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### 2024 CASH FLOW STATEMENT

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(1) They do not include IFRS 16 liability, respectively for €172mn as at 31.12.23, and €229mn as at 31.12.24

(2) EBITDA includes IFRS 16 effect for €17mn

(3) It includes, among Others, reversal of no-cash items (PTC USA)

(4) They include €5.6mn of dividends to Minorities

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# **2025 GUIDANCE & CONCLUSIONS**

Paolo Merli - CEO

#### 2025 GUIDANCE

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## BECOMING MORE SELECTIVE IN A COMPLEX SCENARIO

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❑ Value over Volume approach reinforced ❑ 2024–2026 CAPEX cut by 20% (-30% on 2025-26), driven by delays of FERX and a cautious stance on US

❑ EBITDA >€600mn ❑ PPA and CfD as the main tools to 85%-90% quasi-regulated **>€600mn**

> ❑ In the BP period room for re-leverage and accelerate growth ❑ Commitment to maintaining an IG rating ❑ Competitive cost of financing

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❑ Superior annual shareholder remuneration with a floor at €1/sh as cash dividend and flexibility to allocate extra-cash Peers' avg. on buyback, based on yearly performance and perspectives

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# **APPENDIX**

## PRO-ACTIVE ROUTE TO MARKET APPROACH THROUGH VOLATILE YEARS

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| Country & Asset Type |  |                               | Plants & Capacity                                      | Price Structure               | Tenor / Start Date                 | Counterparty | Volume                                            |
|----------------------|--|-------------------------------|--------------------------------------------------------|-------------------------------|------------------------------------|--------------|---------------------------------------------------|
|                      |  | Greenfield                    | Evishagaran<br>/ Craiggore<br>tot. 70MW                | Fixed Price                   | 6 years<br>Jan '22                 |              | ~240GWh/Y<br>Pay as Produced                      |
|                      |  | Asset Based<br>FiP<br>expired | Bois Bigot, Bois de l'Arche/Theta<br>PTF<br>72MW       | Fixed Price                   | 5 years<br>Sept –<br>Dec '21       |              | ~150GWh/Y<br>Pay as Produced                      |
|                      |  | Greenfield                    | Mulligan<br>70MW                                       | Fixed Price                   | 12 years<br>Jan '23                |              | ~Avg. 133GWh/Y<br>Fixed Shape                     |
|                      |  | Greenfield                    | Great Pathfinder<br>224MW                              | Fixed Price                   | 12 years<br>Apr '23                |              | ~831GWh/Y<br>Pay as produced                      |
|                      |  | Greenfield                    | Sandy Knowe<br>/<br>Creag Riabhach<br>tot. 179MW       | Fixed Price                   | 10 years<br>Jan '23                |              | ~400GWh/Y<br>Baseload                             |
|                      |  | Greenfield                    | Garnacha<br>149MW                                      | Discount to Mkt<br>with Floor | 12 years from COD<br>(Apr '24)     |              | ~190GWh/Y<br>Pay as Produced                      |
|                      |  | Repowering                    | Partinico-Monreale<br>42MW                             | Fixed Price                   | 12 years<br>Jan '23                |              | ~70GWh/Y<br>Baseload                              |
|                      |  | Greenfield                    | Chaume<br>Solar<br>29MW                                | Fixed Price                   | 15 years<br>Jan '25                |              | ~35GWh/Y<br>Pay as Produced                       |
|                      |  | Asset Based<br>FiP<br>expired | Wind Portafolio<br>48MW equiv. + 53MW                  | Collar Structure              | 9 years<br>Jan '23                 |              | ~420GWh/Y Baseload +<br>~120GWh/Y Pay as Produced |
|                      |  | Repowering                    | Camporeale + Mineo-Militello-<br>Vizzini<br>tot. 150MW | Fixed Price                   | 15 years<br>Jan '24                |              | ~250GWh/Y<br>Baseload                             |
|                      |  | Greenfield                    | Roccapalumba<br>47MW                                   | Fixed Price                   | 20 years from COD<br>(Jun '24)     |              | ~100GWh/Y<br>Pay as Produced                      |
|                      |  | Asset Based                   | Rotello<br>42MW                                        | Fixed Price                   | 5 years<br>Jan '25                 |              | ~100GWh/Y<br>Pay as Produced                      |
|                      |  | Asset Based                   | Wind Portfolio<br>5MW equiv.                           | Fixed Price                   | 5 years<br>Jan '25                 |              | ~44GWh/Y<br>Baseload                              |
|                      |  | Asset Based                   | San Cireo<br>30MW                                      | Fixed Price                   | 5 years<br>Jan '25                 |              | ~64GWh/Y<br>Pay as Produced                       |
|                      |  | Greenfield                    | Corlacky<br>47MW                                       | Fixed Price                   | 15 years from COD<br>(exp. 4Q '25) |              | ~180GWh/Y<br>Pay as Produced                      |

**TOT: ~3.3TWh/Y(1) 35**

#### BUSINESS ENVIRONMENT

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(2) UK prices net of balancing revenues

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### A SNAPSHOT OF FY AND 4Q 2024 RESULTS: PRODUCTION

| 2024                  | 2023  | Δ                   | Energy Production (GWh):                                                      | 4Q 2024             | 4Q 2023 | Δ                  |
|-----------------------|-------|---------------------|-------------------------------------------------------------------------------|---------------------|---------|--------------------|
| 2,720                 | 2,784 | (64)                | Italy                                                                         | 708                 | 851     | (143)              |
| 1,210                 | 1,315 | (104)               | France                                                                        | 322                 | 435     | (113)              |
| 568                   | 629   | (62)                | Germany                                                                       | 153                 | 217     | (64)               |
| 710                   | 742   | (32)                | East Europe                                                                   | 194                 | 236     | (41)               |
| 588                   | 455   | 133                 | UK & Nordics                                                                  | 168                 | 129     | 3<br>8             |
| 479                   | 213   | 266                 | Spain                                                                         | 6<br>3              | 5<br>7  | 6                  |
| 684                   | 0     | 684                 | U<br>S                                                                        | 240                 | 0       | 240                |
| 6,959<br>1,357<br>932 | 6,139 | 820<br>1,357<br>932 | Total Energy Production<br>of which, Contribution of new assets:<br>•<br>Wind | 1,848<br>403<br>361 | 1,925   | (77)<br>403<br>361 |
| 425                   |       | 425                 | •<br>Solar                                                                    | 42                  |         | 42                 |

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### A SNAPSHOT FY AND 4Q 2024 RESULTS: EBITDA

| 2024   | 2023   | Δ      | Adjusted EBITDA (€ mn):      | 4Q 2024 | 4Q 2023 | Δ      |
|--------|--------|--------|------------------------------|---------|---------|--------|
| 339    | 299    | 4<br>0 | Italy                        | 8<br>7  | 8<br>2  | 5      |
| 5<br>1 | 8<br>1 | (30)   | France                       | 1<br>6  | 3<br>0  | (14)   |
| 3<br>4 | 6<br>8 | (34)   | Germany                      | 1<br>0  | 2<br>1  | (11)   |
| 5<br>4 | 4<br>9 | 5      | East Europe                  | 1<br>6  | 1<br>2  | 4      |
| 3<br>0 | 3<br>8 | (8)    | UK & Nordics                 | 8       | 1<br>7  | (9)    |
| 1<br>5 | 2<br>0 | (6)    | Spain                        | 2       | 3       | (0)    |
| 3<br>2 | 0      | 3<br>2 | U<br>S                       | 1<br>2  | 0       | 1<br>2 |
| (21)   | (21)   | (0)    | Corporate                    | (6)     | (5)     | (1)    |
| 535    | 534    | 1      | (1)<br>Total Adjusted EBITDA | 145     | 159     | (14)   |
| 73     |        | 73     | of which, Perimeter effect:  | 26      |         | 26     |
| 60     |        | 60     | Wind<br>•                    | 24      |         | 24     |
| 13     |        | 13     | Solar<br>•                   | 2       |         | 2      |

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